September 18, 2017 / 2:06 PM / a year ago

UPDATE 2-Petrobras sells $2 billion in bonds, replacing costlier debt

 (Adds final results)
    By Guillermo Parra-Bernal and Paul Kilby
    SAO PAULO/NEW YORK, Sept 18 (Reuters) - State-controlled
Petróleo Brasileiro SA raised $2 billion from the
sale of seven- and 10-year securities, replacing more expensive
shorter-dated bonds as it seeks to trim a debt burden that is
the largest among major oil firms.
    Two people with direct knowledge of the deal said on Monday
that Petrobras sold $1 billion each worth of senior unsecured
bonds due in 2025 and 2028, respectively. The people said
Petrobras sold the January 2025 bond at a yield of 5.3 percent,
and the January 2028 bond at 6 percent.
    The company had proposed interest of between 5.35 percent
and 5.5 percent for the 2025 security, and around 6 percent for
the note due in 2028. 
    Simultaneously, Petrobras has proposed that holders of
different notes maturing between 2019 and 2021 either tender
their debt or swap it for longer-dated securities. The deadline
for the swap and repurchase tenders is 5 p.m. ET (2100 GMT) on
Sept. 22, the filing said.
    The transaction, which follows a significant improvement in
Brazil's investment risk profile, underscores how Petrobras has
regained the ability to obtain financing, both locally and
overseas, amid efforts by Chief Executive Officer Pedro Parente
to cut $85 billion of net debt.
    Over the past week, Petrobras has refinanced over $2 billion
in trade finance and other types of loans with local and
international lenders, smoothing out looming amortizations
through the end of the decade.
    Rio de Janeiro-based Petrobras, Brazil's largest
state-controlled firm, has been forced to sell assets and slash
spending as it recovers from the plunge in oil prices and a
giant price-fixing, bribery and political kickback scandal. 
    It has hired the investment-banking units of Bank of America
Corp, Banco do Brasil SA, Citigroup Inc, Credit Agricole SA,
HSBC Holdings Plc, JPMorgan Chase & Co, and Banco Santander SA
to manage the offering. 
    Following is a table with the debt securities that Petrobras
seeks to either swap or repurchase through the week. Petrobras
has imposed a $500 million limit for the debt repurchase plan.
              TYPE OF TRANSACTION                  PRINCIPAL
    SWAP WITH NEW 2025 DEBT (4.875 pct bond      $542.535 mln
                 maturing 2020)                  
    SWAP WITH NEW 2025 DEBT (5.375 pct bond       $5.250 bln
                 maturing 2021)                  
    SWAP WITH NEW 2028 DEBT (7.875 pct bond      $705.560 mln
                 maturing 2019)                  
     SWAP WITH NEW 2028 DEBT (5.75 pct bond       $1.165 bln
                 maturing 2020)                  
    SWAP WITH NEW 2028 DEBT (8.375 pct bond       $6.750 bln
                 maturing 2021)                  
   REPURCHASE (7.875 pct bond maturing 2019)     $705.560 mln
   REPURCHASE (4.875 pct bond maturing 2020)     $542.535 mln
    REPURCHASE (5.75 pct bond maturing 2020)      $1.165 bln
   REPURCHASE (5.375 pct bond maturing 2021)      $5.250 bln
   REPURCHASE (8.375 pct bond maturing 2021)      $6.750 bln
 (Reporting by Guillermo Parra-Bernal; Editing by Paul Simao and
Jonathan Oatis)
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